DEAR BRUCE >> My wife and I live in Southern California and are in our early 80s. We own a few properties with mortgages with national lenders. We have 50 percent or more equity in each property. The properties are all in a family trust. We have two adult sons, and each is married with children. Each property is to be passed in a fair manner to our sons upon our passing.

My wife and I have a question about mortgages, which is important to us at this stage of our lives. The loans on our properties have a low fixed interest rate based on historic lows. The question is: Will the lenders allow the loans to be transferred "as is" to our sons? We have heard several different stories and are interested in finding out the standard practice in such cases.

— H.R.

DEAR H.R. >> There is no ironclad standard that would allow the mortgages to be continued on to your heirs unless it is spelled out in the mortgage agreement. You may also have to pay a premium to have this right passed on. It seems to me that you should investigate.

Either you or your attorney should contact each of the lenders, inquire what its policy is and proceed from that point. In that you have a substantial interest in each property, it would seem to me that this benefit can be negotiated, or alternatively (since mortgages are still very low), you can look elsewhere. Since you have substantial amounts of monies in these properties, you should be in a strong bargaining position.


DEAR BRUCE >> With interest rates supposedly going up, is it a bad time to buy utility stocks and REITs?

— R.E.

DEAR R.E. >> Interest rates are going up, but at a very slow rate of a quarter of a percent a year or thereabouts. That having been said, there are many more things about the market right now that should be considered than just that minor change.

Utility stocks are generally a good investment, although even as these words are being written, they are taking a beating like everything else. The same is true for the REITs. I would be considering all the other factors in the marketplace, which are substantial, rather than only a slight interest rate change. Of course, there is no guarantee that the fed won't reverse its thinking and even lower interest rates again. Good luck!

DEAR BRUCE >> I am 65, and I am going to retire next year. I am looking to put $200,000 of my 401(k) into a fixed annuity. I have read all I can about them, trying to understand them before I go to an agent. What I am not seeing is what happens to the original investment. What is your take on annuities?

— D.B.

DEAR D.B. >> I see no purpose in a fixed annuity other than preserving capital. But until many years have passed, the likelihood is that there will be no return for you and severe penalties to get at the money. The original investment will eventually be returned to you, should you live, and if you die, it will be returned to your heirs as the death benefit of the fixed annuity, which is nothing more than an insurance policy. It may have some benefits on some occasions, but I still am not persuaded that for most people this is a viable way to go.

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